Procter & Gamble’s Beauty Shake-up

The personal care giant reorganizes the top management of its beauty and grooming division following the retirement of Chip Bergh.

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Procter & Gamble Co.’s beauty division is being reorganized for the second time in five weeks, this time with the departure of Chip Bergh, president of P&G’s global male grooming business unit. Bergh, eager to pursue a chief executive officer role, according to a P&G statement, will leave the firm Sept. 1. P&G chairman, president and ceo Robert McDonald seemed to be answering those on Wall Street who have speculated that all the recent departures have indicated a shake-up in the works. Over the past five months, five top beauty executives have departed, including Bergh. McDonald characterized the departures as part of the natural progression of corporate life.

This story first appeared in the June 8, 2011 issue of WWD.  Subscribe Today.

“Making strategic changes to the leadership of our business units is simply normal business practice for us. We have a very strong and deep bench of leadership talent to draw upon when we need to make changes because of promotions, retirements, departures or, more typically, when we are looking to further develop the talent we are growing. We are confident that the leaders and the strategies for the beauty and grooming business are the right ones to deliver our growth objectives. We have delivered seven straight quarters of growth in this business. We know what we need to do and we have the leadership team in place to do it,” said McDonald, adding that he “wishes [Bergh] every success as he follows his ambition to become a ceo in his own right.”

Patrice Louvet, president, Global Prestige, will replace Bergh, moving from Geneva to Boston this summer. Joanne Crewes, currently vice president, Global SK-II and Female Beauty, Australasian, ASEAN, India, Japan and Korea, will succeed Louvet. Crewes and Louvet will assume their new roles July 1.

Bergh joined P&G in 1983 and became part of the grooming business in 2005 when P&G first acquired the Gillette business.

While Louvet and Crowes are P&G beauty vets, along with Gina Drosos, who currently leads P&G’s Female Beauty business, the many changes in such a short period looks to make the $27 billion business ($38 billion including oral and feminine care) susceptible to learning curves. McDonald explained that since insiders are replacing departed executives, disruptions are limited.

“The truth is that our new team has nearly 300 years of collective beauty industry experience,” said the ceo. “Patrice brings tremendous experience and success into his new grooming role. He transformed our hair care business and brought the same level of success most recently to our Prestige business. Joanne is an equally strong leader with broad and deep beauty experience. And Gina is an exceptional business leader with a rich knowledge of the beauty industry. What you don’t see is the depth of the talent that lies beneath this leadership level — highly experienced teams with a passion for winning in the beauty business. The other thing to remember is that we don’t suffer the disruptions that occur when a key leader has to be replaced by someone from outside the company,” said McDonald.

McDonald added that P&G executives moving on to take on new roles of greater capacity is to be expected.

“Frankly, it is inevitable. There are leaders of many world class companies that started their careers with P&G. The focus we place on leadership and development is world renowned and while the vast majority of that exceptional talent pool spend their entire careers with P&G, we will lose a few who move on to become chief officers at other companies. Our regretted attrition rate is very low.”

In March, Christopher de La Puenta, group president, Global Hair Care, P&G, left to take the top post at Sephora. Ed Shirley, vice chairman Beauty & Grooming, announced his retirement in May, but industry sources speculate he will at some point appear in a ceo role.

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